- Location
- Westish Suffolk
Haha, didn't want to stir things up too much.
I've just had that email too. Union Invivo are selling their half share of Gleadell to ADM. Union Invivo are a French farmer co-op run by professionals. I had the opportunity to see them in Paris a few years ago with Gleadell (just after TFF was born & I met @Clive and @Alistair Nelson there too)
We haven't traded with frontier for 8 years now as we got fed up of their attitude. Not saying we won't ever trade with them again but we've certainly not missed them. Farmers don't need frontier but Frontier do need farmers.
I think your premier league is a bi optimistic to include Openfield. Here's my Premier league on financial security only:Should possibly need to rename the thread to ' Grain merchant developments daily wrap up '
So we have
Premier division
ADM Ag
Frontier
Openfield
Championship
Cefetra
Cofco
Glencore
Saxon
+ Indie league
Any omissions? ( or even emissions? )
I think your premier league is a bi optimistic to include Openfield. Here's my Premier league on financial security only:
Frontier
Adm Ag
Cefetra
Cofco
Glencore
Saxon
All others are out of this place. That's plenty of choices to sell to I know. After this it's:
Do you like the rep, does he know his stuff?
Are the lorries run well?
Is the paperwork good?
Do they offer a good range of pricing tools and destinations?
After that it's all down to timing of the sale, end of.
I think your premier league is a bi optimistic to include Openfield. Here's my Premier league on financial security only:
Frontier
Adm Ag
Cefetra
Cofco
Glencore
Saxon
All others are out of this place. That's plenty of choices to sell to I know. After this it's:
Do you like the rep, does he know his stuff?
Are the lorries run well?
Is the paperwork good?
Do they offer a good range of pricing tools and destinations?
After that it's all down to timing of the sale, end of.
I’d probably remove the following from that list based on their last reported accounts on companies house.
Cofco lost £3.15 million - 2017
Glencore lost £3.26 million - 2017
Would definitely redefine the top dogs as
Saxon (Graincorp) £849k profit - 2017
Cefetra £2.79 million profit - 2017
ADM Ag to complicated at this stage
Frontier £27.43 million profit 2017
For ADM you could use Gledall & ADM results.
Very interesting reading the ADM UK ltd they lost a lot of money!!
£18.49 million loss after tax for 2017 compared to a profit of £11.15 million for 2016.
After looking at the figures for Gleadell who made a modest £1.76 million profit 2017.
Main conclusion is that the profit of these firms is shrinking, meaning margins are getting slimmer?
I worry that the smaller merchants will continue to get swallowed up by the big 3.
Frontier, ADM and Cefetra have all been actively buying other businesses. Dalmark, Gleadell, Fengrain and premium crops have all been acquired in the last 12 months by the big 3.
Who’s next?
Excellent postThe industry has to consolidate as it is over-capacity currently. There are fewer farmers than ever but probably the same amount of farm traders. When you have a farmer who gets a phone call from 5 to 6 farm traders on the same day to buy 29 tonnes of Oilseed rape then margins end up going to nothing.
Combine this with the fact the trade lacks discipline and seem happy to buy a load of rapeseed for £1 per tonne margin. So the merchant gets £29 of margin on a £10k load of rapeseed just to keep the business, but the business is costing them A LOT of money as they have:
- Farm traders to pay
- Logistics to organise and pay
- Back office staff to do the contract paperwork
- Hedge the currency
- Hedge the flat price
- Pay for storage commitments
- Take on so much risk
If you look at most merchant accounts, their overheads are about £5 per tonne minimum, but there is not a merchant in the land that gets £5 per tonne margin on a farm purchase. They therefore have to take speculative positions and risk to simply cover costs to subsidise their origination businesses to have the pleasure of buying grain from a farmer....and all the sh!t that goes with it.
Basically be very careful who you all deal with as there is a potential Armageddon coming to the UK grain industry!
There will be just a handful of merchants in the UK very soon.........
None of them, I just try to think like one of them. That's my way of keeping up with the game.Which one do you work for then??
The industry has to consolidate as it is over-capacity currently. There are fewer farmers than ever but probably the same amount of farm traders. When you have a farmer who gets a phone call from 5 to 6 farm traders on the same day to buy 29 tonnes of Oilseed rape then margins end up going to nothing.
Combine this with the fact the trade lacks discipline and seem happy to buy a load of rapeseed for £1 per tonne margin. So the merchant gets £29 of margin on a £10k load of rapeseed just to keep the business, but the business is costing them A LOT of money as they have:
- Farm traders to pay
- Logistics to organise and pay
- Back office staff to do the contract paperwork
- Hedge the currency
- Hedge the flat price
- Pay for storage commitments
- Take on so much risk
If you look at most merchant accounts, their overheads are about £5 per tonne minimum, but there is not a merchant in the land that gets £5 per tonne margin on a farm purchase. They therefore have to take speculative positions and risk to simply cover costs to subsidise their origination businesses to have the pleasure of buying grain from a farmer....and all the sh!t that goes with it.
Basically be very careful who you all deal with as there is a potential Armageddon coming to the UK grain industry!
There will be just a handful of merchants in the UK very soon.........
I think you are spot on here.
My Question for the traders on here.
Why have a cost structure that requires you to trade the tonnage multiple times.
Many blame Brexit. But there was only risk where a book was left open in the hope of making a gain.
Very interesting reading the ADM UK ltd they lost a lot of money!!
£18.49 million loss after tax for 2017 compared to a profit of £11.15 million for 2016.
After looking at the figures for Gleadell who made a modest £1.76 million profit 2017.
Main conclusion is that the profit of these firms is shrinking, meaning margins are getting slimmer?
I worry that the smaller merchants will continue to get swallowed up by the big 3.
Frontier, ADM and Cefetra have all been actively buying other businesses. Dalmark, Gleadell, Fengrain and premium crops have all been acquired in the last 12 months by the big 3.
Who’s next?[/QUOTE
Very interesting reading the ADM UK ltd they lost a lot of money!!
£18.49 million loss after tax for 2017 compared to a profit of £11.15 million for 2016.
After looking at the figures for Gleadell who made a modest £1.76 million profit 2017.
Main conclusion is that the profit of these firms is shrinking, meaning margins are getting slimmer?
I worry that the smaller merchants will continue to get swallowed up by the big 3.
Frontier, ADM and Cefetra have all been actively buying other businesses. Dalmark, Gleadell, Fengrain and premium crops have all been acquired in the last 12 months by the big 3.
Who’s next?
I don't think there cost structure was ever set up to trade the tonnage multiple times, but rather was set up at a time when there was better margins per tonne and also less on farm storage and also larger crop surpluses.